NEW YORK (CNNfn) - U.S. stocks fell Tuesday as economic ripples from last week's terrorist attacks continued to spook investors, pushing the major indexes one step closer to three-year lows.
Another round of companies issued profit warnings, including American Express and Honeywell, after Citigroup, United Technologies, and General Electric pre-announced shortfalls of their own.
Mike Murphy, head of equity trading at First Union Securities, linked some of the selling to words from Transportation Secretary Norman Mineta, who did not offer an immediate bailout plan for the struggling airline industry that investors apparently to wanted.
Still, Murphy was reluctant to place much significance on the day's losses, which were minor compared with Monday's. That's when the Dow Jones industrial average suffered its biggest point loss in history and the Nasdaq composite index fell to its lowest level since late 1998.
"It's been kind of a trend-less day," Murphy said.
Outside the stock market, money fled Treasury securities for a second day amid worries that the government, facing lower tax revenue, will have to borrow more money for defense. The dollar continued its drop against the euro and yen.
Still, Wall Street's second post-attack trading session was orderly and panic-free. Analysts called that positive.
"A big sigh of relief," Chris Grisanti, portfolio manager at Spears Grisanti and Brown, told CNNfn.
The Dow industrials declined 17.30 points, or 0.20 percent, to 8,903.40, its lowest close since December 1998.
The Nasdaq composite index shed 24.47, or 1.6 percent, to 1,555.08, its worst finish since October 1998. The Standard & Poor's 500 index fell 6.02, or 0.5 percent, to 1,032.75, also an October 1998 low.
More stocks fell than rose. On the New York Stock Exchange, declining stocks beat advancing ones 1,931 to 1,228 as 1.6 billion shares traded. Nasdaq losers topped winners 2,306 to 1,443 as 1.8 billion shares changed hands.
Overseas, Europe's stock markets fell while Asia's rose.
Here's a look at the market action as of 3:00 p.m. ET.
Measuring the attack
Investors continued sizing up the impact of the deadly airline hijackings and subsequent crashes, which disrupted businesses and may affect spending decisions for months to come.
"They are still kind of waiting to see the unwinding process that's going to come out of this," Brian Belski, market strategist at US Bancorp Piper Jaffray, told CNNfn, referring to last week's attacks.
Airlines hammered in Monday's selloff edged higher, including Delta (DAL: up $2.29 to $22.93, Research, Estimates), United parent UAL (UAL: up $1.49 to $18.99, Research, Estimates), and America West (AWA: up $0.30 to $3.30, Research, Estimates).
For airlines, the terrorist actions grounded travel and could deter future flying. The industry, which has announced layoffs and flight cutbacks, has requested for $24 billion in aid from the government.
In a press conference, Transportation Secretary Mineta appeared sympathetic to the industry, but offered no firm dollar promises.
American Express (AXP: down $2.87 to $27.38, Research, Estimates) said the terrorist attacks, which left its world headquarters uninhabitable for at least several months, will cause its third-quarter profit to fall short, one day after Citigroup (C: down $0.26 to $39.34, Research, Estimates) issued a similar warning.
Fellow Dow member Honeywell (HON: down $0.99 to $28.51, Research, Estimates) warned it will miss third-quarter and full-year earnings forecasts and said it will cut more jobs than previously announced.
J.B. Hunt Transport Services (JBHT: down $4.80 to $14.70, Research, Estimates) also slashed profit forecasts, blaming lower freight demand and higher costs.
"The economy has suffered a shock," Richard Rippe, chief economist at Prudential Securities, told CNNfn. But Rippe expects only short-lived damage to spending and confidence.
At least 17 companies have issued profit or sales warnings since last Tuesday, when hijacked plans destroyed the World Trade Center, damaged the Pentagon and brought the longest halt to stock trading since the Great Depression.
Investors have rallied around the idea of buying stocks out of patriotism. But that buying has yet to surface in any meaningful way.
Still, eBay (EBAY: up $0.60 to $50.00, Research, Estimates), the online auctioneer, said last week's attack will not keep it from meeting third-quarter earnings targets.
Electronics retailer Best Buy (BBY: up $1.37 to $49.37, Research, Estimates), which topped quarterly profit estimates Tuesday, said its third-quarter profit will meet forecasts.
United Technologies (UTX: up $1.57 to $49.07, Research, Estimates) rose following a pummeling Monday, but Johnson & Johnson (JNJ: down $1.32 to $54.50, Research, Estimates) pulled back.
American International Group (AIG: down $0.95 to $70.05, Research, Estimates), the insurer, fell for a second day along with other insurers facing damage claims from the attack.
Last Tuesday's attack came amid an already difficult time for the economy, which showed almost no growth last spring. Unemployment has risen while stocks have declined. The worst year for profits in a decade has coincided with a big drop in business spending and investment.
However, the latest data offered good news on inflation. The Consumer Price Index rose 0.1 percent in August, while the core rate, which strips out food and energy, gained 0.2 percent.
Limited inflation has allowed the Federal Reserve to wage one of its most aggressive interest rate cut campaigns on record. On Monday, central bankers lowered borrowing costs for the eighth time this year. Few economists rule out another rate cut when policy makers meet early next month.
Tuesday marked the Jewish New Year, Rosh Hashanah, a time when trading volume typically slows. But little has been typical this week, which began with the New York Stock Exchange's busiest day ever. 
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